It's no surprise that a lot of dogs hang out in the offices of Small Dog Electronics - after all, veterinary health insurance is part of the benefit package. Among these happy and healthy beneficiaries are a small black Pomeranian named Fantail Shrimp and a large English bulldog named Hammerhead. But the biggest dog of all is their owner, Don Mayer. He calls himself "Top Dog."
Mayer, 59, is a big man with a big vision who leads a big company out of a small town in a small state. According to him, Small Dog is the third-largest independent Apple computer "reseller" in the country. That means it buys computers from Apple and resells them to customers on-line, over the phone and in two retail stores. Since Apple is also a retailer, it is now Small Dog's main competition, its main supplier and its main supporter all at the same time.
"It's a complicated relationship," Mayer said.
Although Apple won't confirm or deny Small Dog's sales ranking, the company regards Mayer very, very highly.
"He's extremely well-respected in the US," said Mike Hogan, Apple's territory manager for the Northeast and Mid Atlantic. "And his opinion matters. He's a squared-away guy, an innovator. He's extremely conscious of both his Apple customers and Windows customers; he constantly reaches out. He runs a very unique type of business. His 'Kibbles and Bits' newsletter is read nationwide. He's extremely supportive to the other partners. He applies a lot of social responsibility to his business model. He has a very large recycling program. He has a trade-in program. He tries to sell quality products and make each individual sale personal to him through his people."
Mayer is a natural entrepreneur and Small Dog is not the first business he's started. In the 1970s, during the country's first energy crisis, when Mayer was still a student at Goddard College, he saw the possibilities of wind. So he and some friends set up a company, North Wind Power Company (later called Northern Power Systems), and went roaming around the West and Midwest buying up old windmills. After refurbishing them in Vermont, the company resold them all over the country. Fifteen years later, it was designing, producing and installing wind turbines all over the world. Mayer's partner in this venture, architect Dave Sellers, said Mayer always had vision.
"And he has courage," Sellers said. "He knows something is going to work and he makes it happen. Here's a market that doesn't exist - there are broken windmills all over the Midwest, and no windmill industry left, yet he was undaunted. If there's ever a national disaster - something happens that's really horrible and no one can figure out what to do, and there's chaos all around? Then you need a guy like Don, who can see through it, figure out where things need to go, figure out how to get there, and keep everyone laughing and the same time. He's really smart, very clever, has lots of confidence and a great sense of humor."
After leaving the world of windmills and energy, Mayer moved on to another passion: Apple computers. He started a company, Maya Computers, that bought old Macs at auction, refurbished them and sold them. When that business went under, he took a series of jobs working for other people and learned that he'd rather work for himself.
So he started Small Dog in 1994. (He had two Pomeranians at the time, hence the name). Again, he started by buying used Macs at auction, refurbishing them, and selling them on-line through AOL classifieds.
Today, Mayer co-owns Small Dog with his son, Hapy, 37, ("His real name is Happy, however he decided to drop a "p" when he was a youngster," Mayer said). They now sell mostly new computers and Apple accessories, have two retail stores and enjoy sales of about $20 million a year. During the last tax holiday weekend alone, Small Dog took in half a million dollars. The company employs about 40 people, and is known for its commitment to socially responsible business practices - for example, it sponsors a huge, free E-waste recycling program, pays competitive wages, and offers a very strong benefit package.
The big news is that the company will be opening another retail store south of Boston, possibly as early as April. And Mayer hopes to have 20 more New England retail outlets under way within the next five years. It's all part of his exit strategy: if he can increase the cash flow, he can set up an Employee Stock Ownership Plan, sell the company to his employees, and retire.
Social responsibility is a long-standing component of Mayer's personality, and he joined Vermont Businesses for Social Responsibility just after he founded Small Dog. He was chairman of its board from 2001-2008. VBSR is the largest socially responsible business organization in the country, and it represents about 35,000 employees in Vermont, or 10 percent of the state's workforce. Its 600 members have about $3.5 billion in annual revenue. Mayer now chairs its public policy committee.
"Under his leadership, the organization definitely grew in stature and in size," said Will Patten, VBSR's executive director. "Don is a force. He's exactly the kind of business executive that VBSR is about. He's proving you can run a business with a soul and, by doing, so make more money than running one without a soul. The socially responsible business model drives the bottom line. He's a take-no-prisoners, laser-focused business executive, and with that perspective, I think the organization gained focus and traction."
Mayer has entrepreneurship in his DNA, Patten said, but there is a down side.
"Entrepreneurs do not necessarily manage the smoothest, most efficient process," Patten said. "Don's not a great process person. He's results-driven, like all entrepreneurs. He can be brusque and impatient with process in his need to get the job done. But he lives large. He's a large personality. He's a joy. And he hired me, so I love him."
Mayer is a hearty, colorful man who looks a little like the actor Donald Sutherland. He has a big smile, white hair and arms covered with animal tattoos - I spotted a butterfly, an elephant, a hammerhead shark, and Hammerhead himself. During our talk, in the conference room of Small Dog headquarters, Hammerhead spent a lot of time pushing his head into my lap, while Fantail Shrimp moved from one comfortable spot on the rug to another and back again. Every now and then, the two dogs licked each other.
I learned some interesting things about Mayer that afternoon. For one thing, it's not all image; he truly loves dogs. Another thing he loves is the Chicago Cubs; he was wearing a Cubs T-shirt, and Hammerhead was wearing a Cubs collar. He's started all his businesses at home with a credit card. The first time he asked a banker for a loan, his Pomeranian bit her. His relationships are long-lasting - he's been married to Grace, his high-school sweetheart, for 42 years; he's still friends with some of the people he knew growing up in Chicago; and his very first employee is still his close friend.
"One of the most important life lessons I learned was that there are more important things than financial success, and people are one of those things," Mayer said. "Some of the people involved in my first venture still work with me at Small Dog and are friends of mine to this day."
Mayer tells good stories, like the one about how he beat the draft in 1968. During the Vietnam War, Mayer, it turns out, was a serious draft resister with the courage of his convictions. Instead of fleeing to Canada, he stood on a Chicago stage next to Grace, who was nine-months pregnant at the time and burned his draft card. Then he gave a long speech against the war and waited to be arrested.
But the FBI never came for him. Eventually he moved to California, where every now and then he would call to see if the FBI was looking for him. And wonder why they weren't.
"I later found out the reason I had gotten lost for three or four years was that the Reverend Daniel Berrigan, the famous antiwar activist, had broken into my draft board and poured blood on my files," Mayer said. "So I had been basically lost to the system. He poured blood on several people's files, mine among them. At least a couple of my friends spent four years in prison for draft resistance. And I didn't. I'm very lucky in many respects."
Mayer likes to compare himself to Bozo the Clown, the old plastic inflatable toy with sand on the bottom.
"You punch it down and it pops up," he said. "Life is too short to waste on self-pity."
Cubs Fan
Mayer was born in the suburbs of Chicago, the middle of three children, to parents who were also born in Chicago. So he was born to have allegiance to the Cubs.
"My father was an electronics salesman," Mayer said. "He sold transistors and components for Motorola and other companies. My mother worked for Northwestern University in the science department as an administrative assistant."
During high school, Mayer had paper routes in the morning and evening.
"I had to get up at 5:30 in the morning in the middle of the winter and ride my bicycle and throw newspapers on people's lawns," he said. "It was a nice way to make some money. I didn't really like getting up at 5:30, but the work ethic I got from that has provided me with motivation over the years, and also some bit of self-confidence. I learned that if I really worked hard, I could make some money and provide for me and, later on, for my family."
He went on to have a wide variety of high school jobs, everything from selling women's hosiery door-to-door to being a mailman to working in a seasonings packing factory - where he tried to organize a union.
"The Puerto Rican workers were not being paid as much as the white workers and I ended up being chased out of there by the forman waving a crowbar," he said.
By that time, he and Grace were already together.
"We met at Korvettes," he said. "She was a check-out clerk and I was in juvenile furniture. We got married a few years later. We've been married 42 years. I have three kids. One is my partner, and he has two sisters, both living in Vermont. I have grandkids, too."
Draft Resistance
After high school Mayer got a scholarship and started at the University of Illinois. But he dropped out to work against the war.
"I was eligible for the draft, so I became active in the draft resisters," he said. "I was not a draft dodger; I wasn't going to Canada. I wasn't in hiding. It was an act of civil disobedience."
Mayer's parents were less than supportive.
"My father served in the army," he said. "So I had literally no support from my family. I had originally filed for conscientious objector status, and because of the lack of support of my family, and because I'm Jewish - not a religion that traditionally has conscientious objectors - I was turned down."
Later, when Mayer decided he wanted to return to college, he applied to Goddard and was accepted. On his way to Vermont, he stopped by the University of Illinois to see if he still had a scholarship.
"They gave it back to me," he said. "Not a problem. They understood my act of conscience. The woman said, 'You're going to Vermont and I just want to warn you about how absolutely poor the people in Vermont are. I want you to be prepared for that.' But that's not what I found."
It was Mayer's determination to get an education, and his later success at Goddard that helped mend the rift with his family.
Wind N Vermont
Mayer started at Goddard with the idea of becoming a teacher, but a semester at an alternative school in Plainfield changed his mind.
"Then I started trying to figure out what I really wanted to do," Mayer said. "And then I met Dave Sellers. He was an architect and teaching at Goddard. He and I started investigating renewable energy."
Mayer and his young family were living in the commune, "The Dreamers," on a farm with no power and no running water. The other dreamers moved to West Virginia, but Mayer and his family remained.
"I was playing around with appropriate technology to pump water, heat water and create electricity," Mayer said. "I helped Goddard organize its first renewable energy classes. And I began to get seriously interested. This was in 1972 and 1973."
It was the country's first serious energy crisis, and there was no such thing as an interest in renewables. But Mayer did some research and became interested in wind turbines - an important energy source for farms in the West and Midwest during the 1930s, before rural electrification.
"Don was one of the few people in the early 1970s who saw the energy crisis as an opportunity," Sellers said. "It was an open door. I was an architect complaining about the lack of hardware available for alternative energy - there were no efficient wood stoves, no windmills. Before there was any market whatsoever, Don and I started talking and he came up with the idea to look at windmills. He found out about the Jacobs Wind Electric Co. in Minnesota, which went out of business in the 1950s. They sold tens of thousands of windmills for electricity. We came up with the idea of putting ads in Midwest newspapers: 'Do you have an old Jacobs windmill? We'd like to buy it.' Rather than try to invent something from scratch, we wanted to find one of the old ones that work and start where the last guy left off."
Response to the ad was encouraging.
"Don walked in and found about 100 letters from farmers," Sellers said. "We decided to start the North Wind Power Company. Remember, he's still a Goddard student. We thought this was the most fun thing you could possibly do at the time."
The pair convinced the Small Business Administration to give them a $50,000 grant. They used the money to travel out West, buy used windmills, haul them back to Vermont, refurbish them and resell them.
Collecting the old windmills was the fun part, Sellers said.
"We just went everywhere in the West," he said. "North Dakota to Texas, Colorado to Wisconsin. Meeting these farmers, we learned more about the history of America and how to live within the environment than we'd ever learned at school. People out there were doing much better than we are today. They were growing their own food, creating their own energy. We kept an old beater station wagon at the Billings, Montana airport and drove around picking up windmills."
Their mission was to save the world with wind energy, Mayer said. "We got a one-line mention in Mother Earth news and my mailbox was filled with 1,000 letters the next week," Mayer said. "And business was launched. It was because of the encouragement of Dave Sellers and open structure of the Goddard education system that I was able to spend my time learning how to make this a reality."
When they ran out of used parts for the Jacobs windmills, Mayer and Sellers started making their own. Then they received a Department of Energy research grant to develop a high-reliability wind turbine. "There was no windmill industry in America - we invented totally new windmills and sold them from Antarctica to Russia," Sellers said. "One of them is still in production. The Europeans kept on rolling with wind energy, but here in the US, Reagan stopped it."
The company grew; it eventually had 40 employees. Along the way, Mayer helped to found the American Wind Energy Assoc. It's first meeting was at Sugarbush, and now - US Senator Patrick Leahy was its first keynote speaker.
But Mayer was getting restless.
"I stayed for 15 years," Mayer said. "The last contract was a defense contract with the Department of the Navy. We were tasked with providing wind energy, hybrid energy and solar power systems for off-shore scoring platforms for Navy fighter pilots. I found myself giving a presentation on this power system to a group of naval officers, and had this almost out-of-body experience. I was wondering what I would have done as an 18-year-old kid, standing on a stage with my pregnant wife, talking about the reality of war, if I had known that so many years later I was going to be doing a defense contract. I realized I would have done anything to not be in that position."
There were other business issues, as well.
"Dave and I lost control of the company as we raised money to continue research and development," Mayer said. "Others came in, and in a series of stock manipulations and 'deals,' stock was distributed to the point that the original shareholders - Dave, myself and several friends of ours who bet on us and the future of wind energy - lost most of the stock value and our influence. I think some unfortunate decisions were made, and there was no coherent strategic plan. I've always regretted the impact on employees who took stock instead of pay and on those visionary investors who backed us early on in the company's development. However, North Wind Power Company was an amazingly positive environment and business."
Leaving the company did not mean cashing out.
"At that point, because we'd had a number of stock offerings, I owned a smaller percentage of the company," Mayer said. "I did not cash out immediately. I started a new company called Maya Computers, and along the way, through other transactions, the stock in Northern Power became worth a little bit of money. Then I sold it. The money allowed me to pay off my credit card debt. I'd used my credit card to meet payroll at Northern Power from time-to-time. Selling the stock allowed me to get whole again. I had a good credit rating so I could finance Maya. Most of my companies I've started with credit cards."
Maya = Mayer
At some point in every person's life, they face a crucial decision: Mac or PC. For Mayer, it happened soon after Apple introduced the Macintosh in a Super Bowl advertisement.
"From the beginning, I was a Mac guy," Mayer said. "I discovered that if I put a stock PC in front of somebody, it might take a week before they figured out how to use it and produce useful work. But if I put a Mac in front of them, they would be productive by the end of the day. So I started buying used Macs. Ultimately, I had everyone in the company outfitted."
Soon Mayer's friends were asking if he could get them reconditioned Macs. Maya was born - again, in Mayer's home.
"I moved a desk over, and pretty soon I had a business going," Mayer said. "It was more of a traditional mail-order computer company. We printed catalogs and had phone agents and we sold products in that way. It was a great experience, and we had a great team."
Maya failed because it didn't "scale" very well.
"As we grew larger, our overhead grew to the point where it was not sustainable," Mayer said. "So we went out of business. We were not making a profit. The equity we had disappeared, and we ended up bringing in an investor who wasn't compatible. It was painful. You never want to admit failure. And to the extent that it didn't survive, it was a failure. To the extent that everybody involved in the company learned valuable life lessons, it wasn't a failure."
Some of those lessons leaned on social responsibility.
"There was a time at Northern Power when I didn't have any way to make payroll," Mayer said. "Instead of paychecks, which I always handed out personally and so I could thank people for their work, all I could do was thank people and not give them paychecks. What surprised me was that those employees came to work the next day - and the next week. Even though they weren't getting paid. Eventually we were able to raise money and pay them, but to me the reason I had that level of commitment and loyalty was because we had more than profit as motivation. I learned that if I wanted to provide for my family and have a good job, I had to create it myself. And when I created a good job, I saw no reason why the employees I hired should not also have a good job. If you're going to create a job and ask people to spend all their waking hours working for your company, there's a responsibility as an employer to make a workplace that's human-oriented, a place where people can prosper and enjoy their working time."
Some Smaller Jobs
After Maya failed, Mayer opened a branch of the New Hampshire-based PC Connection in Waitsfield. That lasted only a year.
"Vermont's inventory tax killed that," Mayer said. "We had small margins and a high inventory, and it was very expensive. So PC Connection consolidated all its operations over in New Hampshire. I said, 'I don't think my staff is portable.' We let our staff decide, and one person moved to New Hampshire."
And then Mayer was 42, unemployed and looking for a job.
"Yes, I was uncomfortable," he said. "I counsel my friends and employees to take advantage of downtime. If your job ends or you lose your job or you're not going to have to work, take advantage. Figure out what you want to do. Don't rush. I rushed. I was scared. I had three kids and a mortgage."
He took a job with a software company that specialized in address books and calendars - just as manufacturers were incorporating them into their computer operating systems.
"So we had a declining market," Mayer said. "After about a year I decided I had to do something on my own again, and that's when I started Small Dog Electronics."
Apple
For retailers as well as fans, Apple has not always been the easiest company to do business with. For a long time, it refused to authorize other companies to sell its products. And in the late 1990s, it almost went under.
"It was a real opportunity for us," Mayer said, "One of the reasons they were failing is that they didn't have anyone to really forecast demand. So they would make too many of one model and have too many models of the same thing. And they allowed a lot of clones. This was before Steve Jobs came back. They were basically making a huge amount of surplus machines. At the heyday of the auctions, we'd buy a couple of million dollars worth of computers at fire-sale prices. And we had very large margins on those. It was almost a benefit to us. Of course, we never thought they'd go out of business."
Mayer's faith came from his personal experience with Macs.
"We were using the computers," he said. "We knew the technology was superior to Windows technology. We knew that Windows had basically swiped the graphic interface from Mac. At an auction every now and then, I'd buy a batch of PCs. But I never made any money on them. So we were always confident. As we made our business we always said, 'We operate on the trailing edge of technology.' And as Apple became stronger and stronger, we became stronger and stronger with them."
Even after Jobs returned and Apple regained its credibility, its creativity and its edge, it was still a difficult company to do business with.
"When we started, we were not authorized Apple resellers," Mayer said. "We were buying at auctions, just like the regular public. Ultimately, I decided it would make sense to become an authorized reseller. I became a value-added reseller. But I continued to sell my products on-line. That was in violation of Apple's contracts. I got a letter from the senior director of channel sales, Jeff Hanson, saying they were going to have to de-authorize us if we didn't cease and desist."
Mayer happened to be going to California at the time and requested a meeting with Hanson.
"We met for breakfast and it ended up being a five hour meeting," Mayer said. "He and I hit it off. Until he retired last year, he was our biggest champion. Now I'm on the Apple Reseller Board, and we're probably the third largest Apple reseller in the country."
Apple has nothing but praise for Small Dog.
"I've been with Don going on my ninth year, and Apple thinks very highly of what Small Dog has accomplished," Apple's Hogan said. "Small Dog has the highest level of certifications from a service standpoint as well as from the customer service and sales side of it. They're a top-level reseller for us."
A Pomeranian Is A Small Dog
Again, Mayer started Small Dog alone in his home.
"My garage was my warehouse and it was full of boxes," Mayer said.
"My house was full of computers. I would go to public auctions to buy refurbished, discontinued or surplus Apple products. I'd max out my credit cards, sometimes buying $25,000 of these computers. I'd bring them back to Vermont.
At the time, Mayer was also working as a volunteer advertising representative for America Online.
"I was 'Ad Rep Don,' helping to manage the classified section," Mayer said. "As compensation, I got free classified. So I would post that I had these Macs for sale, and I would end up selling them. This company grew so quickly that eventually I convinced my son to help me."
Hapy Mayer, who has a degree from Northwestern University in economics and philosophy, was helping his father do the books on weekends.
"Otherwise, I was doing everything," Mayer said. "Buying them, repairing them, configuring them, shipping them, soldering new RAM. I needed someone with the level of expertise Hapy had. I twisted his arm and said I'd give him half of the company. When he came over, the company really started growing. And he shared my commitment to socially responsibility from the very beginning.
The company's name was an earlier suggestion by one of Mayer's former employees.
"I had two Pomeranians, and Wendy Cohen suggested Small Dog," Mayer said. "I said, 'That's a stupid name.' Fast forward a few years. I didn't want to name the company Data This or Mac That or Tech Something - those were silly names. So we named it Small Dog."
Mayer sees the name as a reminder to keep the business small and manageable. He also recognizes the value of personalizing the company when you're doing business in an impersonal environment such as the Internet.
"The dogs really help us do that," Mayer said.
Eventually, his wife suggested that the business was too large for the house, so Mayer ripped out a strawberry patch and built an office. Soon he had 12 people working there.
"We met with our accountant, and he said, 'You guys can use a line of credit from a bank. I'll line up some interviews,'" Mayer said. "He brought us several bankers. One was from Chittenden Bank. I had a gray Pomeranian, and she liked to sit between the keyboard and the monitor on my desk. She was extraordinarily aggressive. Anyone who came within five or ten feet of my desk would hear her growling, snapping and snarling. But she had small teeth, so she couldn't really hurt someone. The banker wanted to see the Web site, and I warned her about the dog. And then? Snap! 'Oh great,' I thought, 'there goes my line of credit.' They actually did not give us a line of credit. Vermont National Bank did, but it was ultimately bought by Chittenden, and we've had a long and successful relationship with them. None of my dogs have bitten any bankers lately."
Clicks To Bricks
Calling the business "Small Dog" hasn't stopped Mayer from thinking about growth and expansion. His first move along those lines came in 2004, when he opened a retail store at his Waitsfield compound.
"Our online business was very strong," Mayer said. "But we were creating community with our newsletters and our Web site. As we became more and more popular, people started coming to visit us. Our vision of a retail store was a plain white room with a little window. Someone would open it and yell, 'What do you want?' We didn't want to do retail. But one day I found myself doing payroll and there was a family of people sitting on a couch next to my desk looking over my shoulder. I'd walk down to the warehouse and there would be people wandering around the inventory. And I'd say, 'You know, we have to do something to manage the people.'"
The answer was a retail store.
"If that store broke even it would be fine, because it managed that problem," Mayer said. "But that store wildly exceeded our expectations." Customers then insisted on a retail outlet in Burlington. Eventually, in 2005, Mayer complied. And the store exceeded revenue expectations again.
"That store, which my Apple representative suggested might be a $5 million store, ended up being a $10 million store," Mayer said. "It was wildly successful. It was as if though people were just waiting for us. It was featured by Apple as one of their success stories."
Before the Burlington store opened, Small Dog's business was 85-percent on-line and 15 percent retail. Now it's closer to 50-50.
"People prefer the retail method of buying," Mayer said. "They like to see and touch and meet the Small Dog people. It gives us an opportunity to interact with the customers in a positive way."
The stores came at a fortuitous time. In 2002, Apple discovered that it, too, could sell refurbished Macs on-line. So it stopped selling them to retailers.
"So we went from $10 million of those purchases to under $1 million last year," Mayer said. "We had to replace $9 million in sales. And we have done that in a lot of different ways. We anticipate that the retail component of our business will be growing faster than the online component of our business."
Small Dog benefits from Apple's current skyrocketing popularity. The iPod, iPhone and iTunes are great hits, but it's the Mac that drives Small Dog.
"It's the failure of (Microsoft's) Vista and the success of Apple's 0S 10.5, Leopard, and the ease of transferring from one system to the other," Mayer said. "Ipod, iPhone and iTunes are giving people exposure to Apple software. They're learning how easy it is to use, how free of bugs, how integrated it is with hardware and software. So it's a much easier sell."
Hence the plans to expand to other regions of New England. Mayer is negotiating now with a mall under construction south of Boston - he is keeping the location a secret, for now. If all goes well, he intends to open a retail store there in April.
"We have other shopping developments under construction, or in the planning stages, in New Hampshire," Mayer said. "Those will be the next two or three stores. I would like to see 20 stores within five years."
The opportunity is there, Mayer said, because even though Apple has opened retail stores in major metropolitan areas, it will not be going into smaller markets.
"That gives us the opportunity to operate in what they call 'white space,'" Mayer said. "There are plenty of towns in New England with 50,000-200,000 population. Our goal is to become a regional Apple reseller. We will be opening more stores in Vermont, but now the investment in infrastructure means that we need to have larger stores. Stores in Vermont would have to be smaller - anything in Vermont would be smaller than Burlington. It's a 'clicks-to-bricks' strategy, and it's what we see as the trend in computer purchasing. If everybody is buying computers at the same price, then why buy from one company or another? My answer is the same one I posed to Jeff Hanson 15 years ago. We have to give the customers as many as reasons as possible to buy from us. Dog lovers love us. In our newsletters and personalities, we're personable and approachable. I get hundreds of letters about my newsletter that say, 'It's like getting a letter from a friend.' So, giving people reasons to buy from you is our marketing plan."
Doing Business In Vermont
The state's tax holiday weekends mean big sales numbers for Small Dog, and Mayer supports the concept.
"We did probably 10 times the normal sales on that last holiday," Mayer said. "But there are arguments on both sides. I know people say that the state loses a lot of revenue. But if you look at it in terms of a stimulus to the economy based on consumers struggling to make ends meet, and students who need computers to go back to school, then I think it was a strong, positive economic event. So were the federal rebate checks. The revenue the state lost on the tax holiday is probably offset by the increased amount of visitors to our state, the overtime we gave to employees, and the shot in the arm to the businesses who exist in this state."
Small Dog received support from Apple for the tax holiday.
"They gave us extra discounts and provided us with special inventory," Mayer said. "We were able to leverage the tax free event to get even better discounts from Apple for the customers. Together, in both stores, we made half a million dollars."
Vermont is not a bad place to do business, Mayer said, but it's not entirely easy to do business here, either.
"I think Vermont is business-selective," Mayer said. "You have to understand Vermont in order to do business here. The primary advantage is the people. Vermonters work much better than people I import from somewhere else. I have better employee retention, better employee productivity, better employee loyalty, than any of my competitors in other states. When I talk to colleagues, I find their personnel problems are much greater than mine. I have an incredible work force. I think Vermonters are special people. They've learned the same lesson I learned: if you want to make it for yourself and your family, you work hard to make it for yourself and your family. That kind of work ethic translates into the kind of employees and success that Vermont business have."
After 35 years here, Mayer is committed to keeping his business in Vermont.
"I've traveled all over the world," he said. "The lifestyle and the quality of life we have here in Vermont is conducive to strong businesses.
If you poll VBSR, you wouldn't find many of our members saying Vermont is bad for business. But if you're not paying a livable wage, if you're not part of the community and if you're not giving back, then it's different. My definition of corporate responsibility comes from defining the company as part of a community. A business that does not recognize that has a harder time here."
Health insurance costs are the biggest obstacle, but that's true all over the country, Mayer said.
"It's the single most uncontrolled and uncontrollable element of a company's overhead," he said. "It is a misplaced responsibility. It should not be the responsibility of employers. We're not qualified to decide how much coverage or what insurance company. That's not my expertise. Look at the alternatives. Toyota decided to place a plant in Canada because of the known issues of health care there. They understood the system, understood costs, understood what the likely increases would be over a number of years. This is important. In Vermont, if we go beyond the Band-Aid that Catamount is, we have an opportunity to become extraordinarily friendly to businesses by setting up a universal health care system."
Some people argue that universal health care would cost taxpayers more, but Mayer disagrees.
"I calculate health care costs as 16 percent of payroll," Mayer said.
"Even if there were a payroll tax, no one would ever anticipate 16 percent. A public health care system would save me money."
E-Waste
Now that computers are commonplace and people upgrade them regularly, their dark side is more apparent.
"These electronics are full of dangerous materials like mercury switches, flame retarders, and all the old technology," Mayer said. "We can't let this material in our landfills, nor can we let it be piled up, shipped to some Third World country and disassembled in unsafe conditions."
Two years ago, Small Dog started sponsoring an free E-Waste collection day at its So. Burlington store on Earth Day. It has been spectacularly successful.
"We provided proper, safe and sound recycling and disposability," Mayer said. "At both of our stores, we collect electronic waste year round. We charge what we get charged, which is about 25 cents a pound to properly recycle these products. But then we decided to do a major free recycling event. So we teamed up with the Chittenden Solid Waste District. We figured we'd get five tons - 10 at the most. We got 50 tons. Our budget was $10,000. It ended up costing us $20,000. It was an incredibly uplifting event for our staff. We all worked our asses off. We had a mountain of electronic waste in our parking lot. We spent until well past midnight loading it up in the trucks. We had smiling customers thanking us. Hapy and I felt great about spending the $20,000, even though it was well over our budget. We knew we were doing something good."
This year, partnering with Green Mountain Coffee Roasters, Seventh Generation and Ben & Jerry's, Small Dog did another one.
"We expected between 50 and 60 tons," Mayer said. "We got 150 tons. We had traffic tied up on the Interstate with people coming in. We weren't even able to load all the stuff into trucks on the same day. It took an entire weekend to clean up. And we all felt good. Our partners are excited about what we've done. Next year, we're talking about making it an event, with music and hazardous waste recycling. I'm saying let's expand it. Let's get 300 tons."
The E-waste goes to Good Point Recycling in Middlebury, where the computers are taken apart, the precious metals are removed, and the lead and glass are recycled properly.
"We're the only computer retailer in the country that can say we've recycled more computer waste than we've sold," Mayer said.
The Future
So Small Dog is well on its way to becoming Large Dog. What does the future hold for Mayer?
"I tell my employees all the time, the point at which I walk around the company and don't know everybody's name is when it's time for me to leave," Mayer said. "But I guess the definition of small keeps moving for me."
Since Mayer's exit plan involves selling the company to his employees, he has to increase its cash flow - hence, the new retail stores.
"I want to make this an employee-owned company," Mayer said. "I believe the company stays stronger that way. But we need to achieve the level of revenue, cash flow and profit that will allow us to achieve the goal."
There are other alternatives, but Mayer does not find them attractive.
"We can go public to raise capital," he said. "I can sell my stock and have a big pile of money to retire on. Or I sell the company to somebody. Or give it to my son. The first two have inherent difficulties. If we go public, like Ben & Jerry's, we lose control over the future of the company. Does it make sense for our main distribution center to be in Vermont? Maybe not. So our headquarters and our jobs may move out of the state. I don't want that to happen. I'm committed to the state. Same thing with selling it to someone else. The third alternative, the employee stock ownership plan, makes sense. We use our profits to finance purchase of the company from the owners on the behalf of the employees. There's an incentive to stay in the state. The owners get paid by the success of the company. And we have, on a federal basis, a nontaxable entity."
Mayer said that he and his son are in agreement about eventual employee ownership. As an aside, he added, that when he was younger, he and Hapy would sumo wrestle to resolve disagreements.
"We'd disagree on a purchase or policy and in our typical father-son relationship, we would argue verbally about it," Mayer said. "Employees that were new might be freaked out a bit but those that knew us would smile and chant "Sumo, Sumo." And we'd push back the chairs and go mano-to-mano. And I'd usually lose. One Halloween, Hapy even came dressed as a Sumo wrestler, in a big blow up Sumo costume. We stopped doing it because he's bigger than me now. But we have a remarkable relationship. What keeps us focused is our commitment to social responsibility. We have no question at all that that's what's important to us."
Mayer has a growing list of things he wants to do when he retires. These include travel and writing a book about ferries in America. He and Sellers have kicked around for years the idea of turning their early windmill experiences into a book called "Stalking the American Turbine."
And he would like to write about socially responsible business success.
"How does a company that has small margins - we have 15 percent, with some Apple products at 8 percent - maintain social responsibility," he said. "How does the corner grocery store? That's what I'm interested in talking about."
But there's always the chance that he will start another business. In his garage. But probably not with a credit card.
"Business is exciting," he said. "I love creating businesses. It's a great opportunity to make more than money. It's a way to make social change."
© 2008 Boutin-McQuiston, Inc. Provided by ProQuest LLC. All Rights Reserved.
Copyright 2008 Vermont Business Magazine
